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Criminal Attorney Oklahoma Defense Lawyer Adam R. Banner OKLAHOMA CRIMINAL DEFENSE ATTORNEY AT LAW
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The Oklahoma Legal Group Blog

A Potential Change to Oklahoma’s Liquor Laws?

Adam Banner - Tuesday, October 08, 2013

I want to be able to buy cold “strong” beer from a convenience store. I just may never get that chance in Oklahoma.

However, if all goes as planned, Oklahomans could serve the King of Beers to their Thanksgiving and Christmas guests.  Come November consumers will likely see full-strength Budweiser products taking up space at local liquor stores. After 30 years of only selling 3.2% beer to Oklahoma, Budweiser decided to return to Oklahoma’s strong beer market with products like Budweiser, Budweiser Black Crown, Rolling Rock, and Bud Light Lime Lime-A-Rita.

With the upcoming availability of Budweiser products carrying that oh-so-important OK+ symbol, many simply rejoice they will no longer have to drive to Texas to buy that coveted Lime-A-Rita. Others see this move as a giant leap forward in the grand scheme of liquor law reform in Oklahoma. But when I heard this news I thought “Why now?” and “What’s changed?” After a little research into a realm of Oklahoma law that I never knew was so complicated and convoluted, I came up with some answers. Maybe.

First of all, Budweiser’s decision to sell their full strength products in Oklahoma didn’t follow a change in Oklahoma law because Oklahoma’s liquor laws haven’t changed. Strong beers are those having an alcohol-by-weight of greater than 3.2 percent, according to ABLE. For the past 30 years Budweiser chose not to sell its stronger beer products to Oklahoma all the while being free to do so. Why did Budweiser not sell strong beers in Oklahoma for 30 years? The answer comes down to money and control. But first, we need a history lesson.

Oklahoma ended prohibition in 1959. Part of the enacted law directed that no brewer, winery or distiller can enter into a franchise agreement with licensed liquor distributors in Oklahoma. Between 1959 and 1976, however, the no-franchise clause between alcoholic beverage manufacturers and liquor wholesale distributors did not have much effect, probably because it was unfamiliar, ignored, or misunderstood at the time. That all came crashing down when an Ardmore distributor sued Coors because Coors wouldn’t sell to them. Coors defended itself by saying they already used a distributor in the area.  

The court ruled in 1977 that Coors must sell to the Ardmore distributor, or face a violation of the franchise ban. Coors ceased selling strong beer to Oklahoma distributors in order to persuade people in Oklahoma to allow franchising.  Anheuser-Busch and Miller also use the franchising system, and they followed Coors’ lead out of the Oklahoma strong beer market. Coors’ plan backfired when in 1978, Oklahoma voters voted against a repeal of the no-franchise ban which would’ve allowed brewers the freedom to control the distribution of their beer. Fast forward to 2013, and the no-franchise ban has remained unchanged.

Presently, only Oklahoma and Utah continue to operate an “open wholesale system” where beverage companies must sell to all wholesalers in the state on a same-price basis. In an open wholesale system, the product is 'imported' by a wholesale distributor, and the distributor is not required to follow manufacturer's policies concerning their product when the distributor sells to your local liquor store.  

The other 48 states have abolished the franchise system, including Kansas, who interestingly changed its law from an open wholesale to a territorial franchise system in 1978 after witnessing the chaos that happened in Oklahoma. In a franchise agreement, the wholesale distributor must follow the manufacturer's policy on quality control and advertising.  Budweiser, along with Miller and Coors, didn’t want to lose control of the product, and with Oklahoma’s open whole system Budweiser could not control how their beer ultimately reached you and me. And that’s what caused the 36 year hiatus. Control. Budweiser wanted control, and after 36 years Budweiser decided control wasn’t quite as  important anymore.

Compared to the rigorous laws governing the sale of alcohol in Oklahoma liquor stores, the laws governing the sale and distribution of 3.2% beer in grocery and liquor stores is less controlled. Low point (3.2%) beer is exempt from Oklahoma's liquor laws because any beer under 3.2% is considered “non-intoxicating.” Thus, franchising among low-point beer distributors is allowed; therefore Budweiser is able to self-distribute its 3.2% beer. Further, these beverages can be maintained at constant refrigeration.   

So this begs the question: why has Budweiser decided to sell to Oklahoma now? Anheuser-Busch offered a simple explanation for its decision. Regional Vice President Keith Diggs said in a statement that “select additional Anheuser-Busch products with greater than 3.2 percent ABW” will be made available in Oklahoma “in response to consumer demand.”

Honestly, I predict it won’t be long before we will be able to see Coors and Miller products unrefrigerated at our local liquor stores. While this might be convenient, I can’t help but think that if the “Big 3” give in to the Oklahoma demand for high-point beer, then Oklahoma law makers will never change Oklahoma’s archaic laws, and we will all be left with the ludicrous fact that you can’t buy cold high-point beer. And the annoying fact that you’re S.O.L if your mother-in-law wants some wine at your impromptu Sunday dinner.  Or the inconvenient fact that you have to make two stops instead of one if you want to buy ice, or limes, or a wine opener, or cups to go along with your alcohol purchase.

However, many groups of Oklahomans are trying to change the laws. A group of citizens in Garfield County are fighting to change the “Dry Sunday Law.” The proposed “Liquor by the Drink” law would allow licensed businesses to sell and serve any alcoholic drink on Sundays between 10 a.m. and midnight. Currently, you can only buy or sell beer on Sundays with a 3.2% percent alcohol content.

Another Oklahoma liquor law reform involves wine in grocery stores. Last year a ballot was proposed to allow wine in grocery stores. The proposed ballot language essentially is seeking to allow the state's 15 largest counties — those with population of 50,000 or more — to decide whether grocery stores of a certain size can sell wine. Eligible counties would include Oklahoma, Tulsa, Canadian, Cleveland, Comanche, Creek, Garfield, Grady, Le Flore, Muskogee, Payne, Pottawatomie, Rogers, Wagoner and Washington.

Supporters of this bill think this would attract desired retailers like Trader Joe’s and Costco to Oklahoma.

But this bill is not without its critics like Brad Naifeh, a partner with Central Liquor Co., who said that big, cosmopolitan cities like Denver, Boston and New York City are all thriving without wine in their grocery stores. "So you can be a cosmopolitan city without" this legislation, Naifeh said.

Critics like Naifeh cite increases in underage drinking and increase in DUI’s as reasons for not mainstreaming Oklahoma’s liquor laws. Personally, I think his opposition for reform stems from his position as an Oklahoma distributor and laws that allow wine and high-point beer in grocery and convenience stores jeopardizes a distributor like Naifeh’s monopoly on the Oklahoma market. 

It’s not about increased underage drinking and DUI, it’s about money.

Even so, according to the Century Council, a national, independent, and not-for-profit organization working in the fight against drunk driving and underage drinking, Oklahoma had 5.8 Alcohol-Impaired Driving Fatalities per 100,000 in 2011. Likewise, Oklahoma had 2.3 Under 21 Alcohol-Impaired Driving Fatalities per 100,000 in 2011. Surprisingly, Oklahoma’s statistics were higher than Texas, a state with incredibly more lax liquor laws than Oklahoma, when compared on the same statistics. Texas’ rate was 4.3 per 100,000 and 2.2 per 100,000 respectively.

So, how do we as Oklahomans analyze these statistics? I know supporters of the current status of liquor laws will cite these statistics as evidence that Oklahoma already has a severe problem with under-age drinking and DUI’s and making the laws more accessible will only expound the issue.

However, I see it another way. People are going to drink if they want to drink. Underage kids will get their hands on beer and engage in binge drinking, no matter if it’s cold or not. The problem in Oklahoma lies in our views regarding alcohol use and not the current state of legislation. The fact that Oklahomans could buy cold high-point beer and ice at the same store will not deter, or exaggerate, drinking in this state.

As you read that last paragraph, you might think, “Of course you’d write that. You are a Criminal Defense Attorney and more DUIs and alcohol related crimes mean more business for you.” Really though, my belief just comes from being around the block a time or two.






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